In March, Bitcoin Magazinereported that Counterparty founders had joined with MathMoney f(x) and its founder Mark Smith as co-founders of the new fintech company Symbiont, focused on fostering the symbiotic relationship between traditional financial markets and cryptographic blockchain technology.
According to the Symbiont’s website, the company is building the first issuance and trading platform for smart securities on blockchain technology. Now, Symbiont has announced that it has secured $1.25 million of seed funding from influential financial market leaders including Duncan Niederauer, former CEO of the New York Stock Exchange (NYSE). A ‘Series A’ round of institutional investment is expected to close in the third quarter of 2015.
“Symbiont is bridging the gap between Wall Street and the emerging blockchain ecosystem,” said Niederauer. “It’s an exciting, timely and much-needed development for the long-term health of the markets.”
“This is a once-in-a-generation opportunity to leverage this previously unimaginable technology for the greater good of investors, financial institutions, and global financial markets,” said Smith, co-founder and CEO of Symbiont. “The blockchain not only has the potential to democratize markets but to drive down the cost of doing business across all sectors.”
The Financial Timesnotes that the investment reflects growing interest by professional traders and infrastructure providers in the use of blockchain technology for global financial markets. Symbiont is developing a platform that allows market participants to create digital, programmable versions of securities. The company hopes the development of these securities, and their availability in one global, decentralized peer-to-peer network, will increase efficiency and transparency and lower the cost of issuing, trading, settling and clearing securities.
Reutersreports that Smith emphasized that the company does not run an exchange.
“Our focus is not trading digital currencies,” said Smith. “Our focus is the application of the blockchain or distributed ledger technology in conjunction with smart contracts for the issuance, management, trading, clearing, and settlement of different traditional financial securities.”
Symbiont isn’t the only company trying to revolutionize the stock markets with the blockchain technology. Nasdaq, a prestigious stock exchange and leading financial institution, recently announced that it will leverage blockchain technology as part of an enterprise-wide initiative, starting with a pilot project in Nasdaq Private Market, a recently launched marketplace that handles pre-IPO trading among private companies.
“Utilizing the blockchain is a natural digital evolution for managing physical securities,” said Nasdaq CEO Bob Greifeld. “Our initial application of Nasdaq’s blockchain technology-enabled offering will modernize, streamline and secure typically cumbersome administrative functions, and will simplify the overwhelming challenges private companies face with manual ledger record-keeping.”
Overstock is developing a new independent stock exchange dubbed Medici, powered by blockchain technology. The new stock exchange could sidestep traditional stock exchanges such as NYSE and Nasdaq and issue corporate stock directly over the Internet.
“The cryptorevolution has arrived on Wall Street,” said Overstock CEO Patrick Byrne. “We’re making it official by offering the world’s first ‘cryptosecurity.’”
In 2014, Counterparty’s technology was selected as the main software backbone for Medici. It was later revealed that Medici will include a wider variety of Bitcoin technologies, protocols and blockchains, but now it appears that Counterparty’s technology will play an important role in the emergent cryptosecurities sector via Symbiont.
“After studying the intricacies of [the blockchain] it became clear that blockchains in general, and Counterparty specifically, could solve longstanding, previously intractable problems that exist in modern financial markets,” Smith said in March. “This epiphany made the decision to join forces with the Counterparty team a logical one.”